Wine distributors from China gather at the National Wine Center of Australia in Adelaide at an industry forum on April 10. Australia became China's largest source of imported wine in 2017 (XINHUA)
Australia was known as "the lonely continent" to the Chinese. But the loneliness has long been ended and today, tens of thousands of Chinese students study there while millions visit as tourists each year.
Almost 5 percent of Australia's population now claim Chinese ethnicity as part of their heritage. This alone makes a significant group, one that figures in business, education and increasingly, politics.
Mandarin Chinese is now the second most spoken language after English. Even the most absent-minded visitors when they land in Sydney or Melbourne or Canberra on flights would be hard pressed to fail to notice the signage in Chinese characters, and the adverts for brands and services geared toward visitors from China that greet them as they make their way through the airport.
It is natural therefore that economically, parties across Australia, whether in the Northern Territories, the Gold Coast or Southern Australia, and the largest of the states in terms of economic size, New South Wales, would look to this newly developing relationship to see what sort of cooperation they can undertake, and how they might benefit from it.
The memorandum of understanding signed between the southeastern state of Victoria and China in October to join the Belt and Road Initiative proposed by Chinese President Xi Jinping is typical of this move by local governments to try to attract as much investment, trade and growth potential links from China to their territories as possible. Most of the other six states and two territories along with the capital territory in Canberra would do the same. Some already have.
Australia has a federal system. In many areas, states have a high degree of independence. They set local fiscal and social policies. As in the United States, they can gather certain kinds of taxes. The federal government maintains principal control over foreign affairs and security. For this reason, there is sometimes discord between the two levels of government. Over China policy, this has become increasingly obvious.
The China bulwark
Since 2010, China has been Australia's largest trading partner, and its largest investor. At the height of the commodities boom in 2013, Chinese direct investment in the mining sector alone was credited with preserving 27,000 good quality jobs in Western Australia. On top of this, it is widely acknowledged that strong trade links with China meant that Australia was the only major developed economy during the 2008-09 financial crisis to maintain positive growth. It has managed to continue this, having never suffered a single recession since early 1990.
The close connection between China and Australia was cemented by the free trade agreement signed between the two in 2014—one of the most comprehensive of bilateral deals that China has agreed to.
In security terms, however, Australia has a strong alliance with the United States. The Australia, New Zealand, United States Security Alliance underpins this. A treaty commitment, it links the three together in terms of sharing intelligence, in working with one another in third territories (Australians have fought with the United States in every war the latter has been involved in since the 1960s, from Viet Nam to Afghanistan), and in giving logistic help and facilities to one another. Since 2010, U.S. marines have the ability to rotate at a facility in Darwin in Australia's Northern Territories.
The presidency of Donald Trump has caused the same anxiety in Australia as it has in Europe and among the rest of the United States' main allies. There has been doubt about just how much Trump cares or knows about the importance of Canberra's commitments to U.S. interests in the region. Despite this, and despite the new and transformed economic situation, where for the first time Australia's main security alliance and chief economic alliance are with different partners, there is no sign that Canberra wishes, or would want to, revise its current security arrangements.
The United States is still seen as the most crucial and important partner, one that Australia has to accommodate and find ways to work with.
Much of this is to do with the Australian feeling of vulnerability. With a naval force of only 27,000, despite their geographical isolation, it is clear that Australians no longer feel as protected from the wider world as they once did. Illegal immigration has become almost a political obsession since John Howard's tenure as prime minister over a decade ago. Radical Islamic-inspired terrorism has started to appear in Australian cities, with the coffee shop attack in Sydney four years ago, in which three people died, typifying this.
A passenger uses the Didi app to hail a car in Melbourne, Australia, on June 25. Didi Chuxing, China's biggest ride-hailing company, started its services in the city on that day (XINHUA)
The lucky country, as Australia is often called because of its amazing natural riches and geography, has voted in increasingly divided and disgruntled ways in recent years, with national leaders changing almost every two years. Since 2010 alone, there have been five changes. Another is expected at the elections to be held next year.
All of this makes the division between state authorities and Canberra even deeper. Those that speak to representatives of either of these communities will notice the very big difference in their outlooks and language.
For the former, the attitude is, the more links to China there are, the better. Everything is geared toward doing as much as possible to work with Chinese companies, and encouraging their own to go north and seek opportunities to develop business there.
But for the latter, the situation is much more about control, about ensuring that relationships are kept within a strict and highly monitored matrix, and where the fervor and zeal of their state colleagues are informed by the concerns they have. It is not rare to see frustration and irritation between these two separate groups.
In recent years, the federal government has certainly asserted itself, particularly over large investments into what it regards as sensitive areas. A major land acquisition bid by a Chinese-led consortium in 2015 was vetoed because it has a military installation next to it.
In 2016, the State Grid Corp. of China, wanting to acquire and run a project in New South Wales, was also stopped—again for political rather than commercial reasons, and at the behest of the man who was then treasurer and is now prime minister, Scott Morrison. In each case, local leaders were frustrated by the inability to get the investment they felt was manageable into their areas.
Australia is clearly undergoing a great deal of internal debate about what sort of framework might work for balancing its central concerns with the imperatives of local governments and their economic tasks. This will not be a short or easy process. National discourse about the relationship with China has become increasingly contentious and divisive, with Canberra leaders introducing legislation last year to militate against what they see as any form of interference in their domestic politics.
How this is interpreted and implemented remains to be seen. Elected officials, after all, can argue that they have a principal duty to their constituents, and that first among their tasks is to look after the latter's economic wellbeing, which is what building closer links with China might achieve.
At the moment, the best that anyone can say is that the sort of agreements like the one between Victoria and China at least keep the dialogue going and maintain a positive direction. And with so much uncertainty in the wider world, Australia would be wise to keep an open mind until more straightforward times come along.
The author is an op-ed contributor to Beijing Review and director of the Lau China Institute at King's College London
Copyedited by Sudeshna Sarkar
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